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Double protection and forum shopping under Germany’s draft UPC legislation


Peter Höcherl (Patentanwalt seconded to Bristows), Annsley Merelle Ward and Nadine Bleach
21 March 2017

Two draft bills have been passed by the Bundestag (German parliament) and have been submitted to the Bundesrat (Federal Council) for approval.  One bill makes it possible for Germany to ratify the Agreement on a Unified Patent Court (UPC)(Drucksache 18/11137  here) and the other to implement the unitary patent system into German law (Drucksache 18/8827 here).  The second bill would amend the Gesetz über Internationale Patentübereinkommen (IntPatÜbkG, Act on International Patent Treaties) and one section of the Patentgesetz (PatG, Patent Act).  It is the second bill that has garnered the most attention in that it would introduce a new provision (Art. II § 18 IntPatÜbkG) which would allow for ‘double-protection’ (or so-called ‘double-patenting’).  That is to say, it would allow, in principle, the same invention to be protected by a German national patent and by a patent subject to the exclusive competence of the UPC, i.e. a unitary patent (European patent with unitary effect) or the German designation of a European patent that has not been opted-out of the UPC’s exclusive competence.

Opted out EPs– amendments to Art. II § 8 IntPatÜbkG

Art. II § 8 IntPatÜbkG that is currently in force prohibits double protection.  A prohibition on double protection is based on the legal principle that the patentee has no legal interest in two monopolies for the same invention.  It also spares a potential infringer the burden of having to defend itself against two (or more) coextensive patents and the courts the burden of dealing with them. The prohibition of double protection currently in Art. II § 8 would remain in play under the proposed amendments to the IntPatÜbkG, and would also apply to opted out patents.  The current Art. II § 8 prohibits double-protection of the same invention by both a German national patent, i.e. a patent obtained via prosecution before the German Patent and Trademark Office (‘DE-patent’) and a European patent with effect in Germany, i.e. a patent obtained by validating an European patent in Germany after grant (‘DE(EP)-patent’), if both patents have an identical priority date and originate from the same inventor(s).

Such scenarios can arise in practice, for example:
  1. where an applicant files a DE-application as well as an identical EP-application on the same day and both applications mature to grant with an identical, or at least overlapping, set of claims; or, more frequently,
  2. where the DE-application was the priority application of the subsequent EP-application and the applicant has not abandoned the priority application.
In both scenarios, under current German law the DE-patent ceases to be effective to the extent it protects the same invention as the DE(EP)-patent.

Proposed amendments to Art. II § 8 IntPatÜbkG clarify that the same legal position will apply to EPs which have been opted out from the exclusive competence of the UPC (under Art. 83(3) of the UPC Agreement).  Therefore, the DE-patent would cease to be effective to the extent it protects the same invention as the opted-out EP.  This effect is irrevocable, and accordingly, although the opt-out may be withdrawn under certain circumstances under Art. 83(4) of the UPC Agreement or the EP could otherwise fall away, the DE-patent would not become effective again.

Non-opted-out EPs and unitary patents –new Art. II § 18 IntPatÜbkG

The proposed new provision, Art. II § 18 IntPatÜbkG (an unofficial translation of which is set out below), in principle allows double protection by non-opted-out EPs or unitary patents on the one hand (collectively ‘UPC Patent right(s)’) and DE-patents on the other hand.  However, the provision prohibits the double enforcement of a DE-patent and the coextensive UPC Patent rights in certain circumstances (which also apply to supplementary protection certificates).  In particular, an action based on infringement or imminent threat of infringement of a DE-patent would have to be held inadmissible by the German court where: 
  • The subject-matter of the DE-patent is an invention for which the same inventor, or his successor in title, was granted a UPC Patent right with the same priority date.
  • There is a pending action before, or a legally binding decision of, the UPC against the same party based on infringement or imminent threat of infringement of the UPC Patent right with respect to the same or equivalent alleged infringing products or processes (embodiments).
  • In the German proceedings, the defendant makes an objection on the above grounds at the first hearing before the beginning of the oral hearing of the main proceedings.
The draft bill currently before the German parliament deliberately refers to ‘infringement proceedings’ before the UPC, whereas the original draft merely referred to ‘proceedings’ before the UPC.  The wording of the original draft was heavily criticised as it would have allowed the defendant in the German proceedings to render the action inadmissible just by filing a declaratory action for non-infringement before the UPC.  The amended wording of the updated draft bill now makes it clear that such action by the alleged infringer would not affect the admissibility of the German infringement action.

Moreover, as the draft bill refers to equivalent embodiments, slight differences in the contested embodiments in both proceedings are not detrimental as long as those embodiments use the same core of the invention.  In the commentary on the draft bill the legislator points out that the existing legislation providing guidance on the ‘matter in dispute’ (‘Streitgegenstand’) should be taken into account when deciding on the question whether or not the contested embodiments in both proceedings are equivalent.  Nevertheless, it appears foreseeable that this will be a controversial point which will give rise to further discussion before the courts.

Furthermore, according to the draft bill, although the defendant in both proceedings must be identical, the plaintiffs may be different.  For example, inadmissibility of the German action cannot be obviated by an assignment of one of the patents to a third party which then acts as the plaintiff in one of the proceedings.  Similar considerations equally hold true with regard to the relationship between patentee and licensee.

Finally, as a welcome development, draft Art. II § 18 (2) IntPatÜbkG additionally provides the German national courts with the discretion to stay the national proceedings until an action pending before the UPC is completed (as long as the defendant has raised the objection in time).  This will ensure that the circumstances and characteristics of each individual case can be taken into account.  In particular, this will be helpful in cases in which it is not yet ultimately clear whether the requirements of the defence under German law are met.

Summary and discussion

The fact that the draft bill makes a clear distinction between opted-out EPs on the one hand and the UPC Patent rights (non-opted-out EPs and unitary patents) on the other hand when it comes to double protection, is potentially indicative that the German legislature has been willing to undermine, at least to a certain extent, the intention underlying the UPC system of providing a one-stop shop for enforcing patents in Europe, without the need for individual national actions.  This is particularly the case for interim or protective measures in which inadmissibility and/or a stay of proceedings is not possible under the draft legislation (see Art. II § 18 (4) IntPatÜbkG), thus resulting in the possibility of double enforcement.  Accordingly, with regard to interim or protective measures the patentee can seemingly enforce a DE-patent as well as the coextensive UPC Patent right without any restriction.

From the point of view of a patentee, the draft bill is welcome as it provides the rights holder with additional options for the enforcement of their patent rights.  Albeit the patentee would not be able to enforce the DE-patent and the coextensive UPC Patent right simultaneously or subsequently as discussed above, the patentee can chose the most suitable court system based on the particulars of the individual case.   For instance, if the German market is of main interest and/or the UPC Patent right faces added matter issues, it would be sensible to enforce only the DE-patent.  On the other hand, if rapid pan-European enforcement is crucial and/or added matter objections are no major concern, an enforcement of the UPC Patent right would be more desirable.  In any case, patentees who usually file their priority applications in Germany and intend to use the UPC for litigating their subsequent EP applications are well advised to keep the German priority applications pending in the future. One can argue that this will allow patentees to have their cake and eat it too.

These advantages of the draft bill would provide patentees with some comfort in the early and uncertain days of the UPC.  In providing this safety net, the draft bill might actually foster a faster acceptance of the new UPC system.  Patentees who have a coextensive German priority application might be inclined not to opt-out the respective EP in order to avoid the DE-patent ceasing to be effective to the extent it protects the same invention as the EP (draft Art. II § 8 (1) IntPatÜbkG).  An increased number of non-opted out EPs would in turn increase the number of cases handled by the UPC and thereby shorten the period of initial uncertainty.
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Draft Art. II § 18 IntPatÜbkG (unofficial translation):

‘(1) An Action based on infringement or imminent threat of infringement of a patent which has been granted according to the Patent Act (PatG) is to be dismissed as inadmissible
  1. as far as the subject-matter of the patent is an invention for which the same inventor, or his successor in title, was granted either a European patent with effect for Germany or a European patent with unitary effect having the same priority, and
  2. in case there is a pending proceeding before the Unified Patent Court against the same party based on infringement or imminent threat of infringement of the European patent or the European patent with unitary effect according to sub-section 1 by an equal [in German ‘gleich’] embodiment, or the Unified Patent Court has rendered a legally binding decision in such a claim, and
  3. if the defendant makes an objection in this respect in the first hearing after the defence arises and before the beginning of the oral hearing of the main proceedings.
(2) In case the defendant raises the defence according to sub-section 1, the court may order that the hearing be stayed until the proceeding before the Unified Patent Court is completed.
(3) Sub-sections 1 and 2 apply accordingly for supplementary protection certificates.
(4) Sub-sections 1 and 2 do not apply for interim or protective measures.’